Metal loses 1.2% in week; copper, platinum post weekly gains
By Claudia Assis and Virginia Harrison, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures settled at their lowest level in six weeks on Friday as investors abandoned commodities and placed their bets elsewhere.
Gold for August delivery GC1Q -1.07% declined $20.20, or 1.3%, to $1,482.60 an ounce on the Comex division of New York Mercantile Exchange, bringing weekly losses to 1.2%.
That was also gold’s lowest settlement since May 17, when it closed at $1,480 an ounce.
“It’s really in line with the overall commodity decline,” said Jim Steel, a metals analyst with HSBC in New York.
Drops for grains and oil were pronounced, spurring a general exit from commodities, he said. U.S. stocks rallied Friday on a surprise increase for a gauge of manufacturing activity.
Gold futures had declined this week after some uncertainty about the euro zone’s debt problems lifted, stanching some of the safe-haven flow to the metal.
Greece approved an austerity plan and laws designed to implement it this week, straightening out the path for more financial aid to avoid a default. Read more on Thursday's metals action.
European leaders could approve a second bailout for Greece as early as Saturday, when euro-zone finance ministers have scheduled a video conference.
Despite the recent weakness, gold prices remain about 5% higher this year.
The dollar index DXY -0.17% , which measures the performance of the U.S. unit against a basket of six rival currencies, pared its gains. The index recently traded at 74.371 from 74.314 in late North American trading on Thursday.
A rising greenback tends to discourage investment in dollar-priced commodities such as gold, and also takes away one of the pillars of gold investing, fear of dollar debasement.
Analysts at BNP Paribas said gold has been supported by inflationary pressures and some safe-haven buying as a result of the euro-zone debt crisis this year.
“The surge in inflationary pressures goes a long way towards explaining the strong demand growth for gold, notably in India and China, as consumers seek to hedge themselves against rising prices,” the analysts said.
The analysts forecast the gold price to average $1,510 an ounce in 2011 and $1,600 an ounce in 2012.
